Abstract

In this project, we assess the impact of international migration, and the induced homecare services labour supply shock, on fertility decisions and labour supply of native females in Germany. Specifically, we consider individual data of native women for the years 1996-2012.
The empirical analysis is based on two large data sets: the German Socio-Economic Panel (GSOEP) data combined with the Indikatoren und Karten zur Raumentwicklung (INKAR – Indicators and Maps on Spatial and Urban Development) data.
This project adds to previous studies from several viewpoints. First, we focus on Germany and we perform a cross-regional analysis. This allows us to understand how migrants interact with the local labour market conditions. This is of particular importance as differences in participation, employment and unemployment rates across areas contribute to the significant variations in women’s labour supply behaviour and migrants assimilation on the labour market. Second, the German education system is characterized by an early track system, which could affect the performance on the labour market. For this reason, in the empirical analysis, we test whether the impact is stronger for (three) different skill levels. Finally, focusing on the behaviour of women, we contribute to the discussion about fertility rates in Germany, which has become an important issue for policy makers. One of the key point for our research question is to what extent the increase of female migrants in Germany has increased the availability of household services.
One of the main difficulties with the empirical analysis of immigration is to address the potential endogeneity issues caused by the location choices of immigrants (since their distribution across areas is not random), and by measurement errors (due to undocumented migrants). To solve this problem, we exploit the tendency of migrants to move to areas with a large share of migrants of the same country of origin and use the past distribution of migrants across areas as an Instrument.